Shrinking Legacy IT Business sees HDS Grow in the Cloud

Historically known as an enterprise storage-focused vendor, Hitachi Data System continues to work its way into the cloud market, which it sees as a “growth opportunity” and complementary to its long-time storage business.

Speaking with ZDNet, Adrian De Luca, Hitachi Data Systems Asia-Pacific chief technology officer, said that given the changing needs of its legacy customers, it was important for the business to take the leap and traverse into the world of cloud, too.

“There’s no secret that legacy IT is shrinking,” he said.

“Certainly the selling of our legacy components such as standalone storage has been a depressed business, but we’re still growing. The reason why we’re still growing is because of private and hybrid cloud.”

In fact, De Luca said HDS is finding its strength is in the private cloud space where the company has seen that side of the business double year-on-year. He said there’s a clear market for private cloud in Australia as many of the company’s existing enterprise customers are after the consumption and automation model, as well as the self-service model of cloud, but still want to retain their existing SLAs.

“Our enterprise customers have a lot of legacy systems; they’ve got legacy skills and fixed investments such as datacentres, so for them it seems like a quantum leap to move the cloud. So they need to typically take smaller and more incremental steps into cloud,” he said.

“What we’ve done is tried to build a journey for a lot of those customers. It’s something we call ‘your cloud, your way’.”

Unlike other traditional vendors such as IBM and Hewlett-Packard — which are also transitioning their business into the cloud market — HDS’s approach to cloud has been through setting up cloud partnerships. In the last two months, the company has signed partnerships with Brisbane-based SureBridge IT, Victoria-based Global Storage, and Avnet to help resell its cloud services onshore across the country. HDS’s offerings are also integrated to work with key software vendors including VMware and SAP.

“HDS is a partner-centric company. Unlike IBM and HP, they want to build the datacentre and run them. We know what we’re really good at but we also recognise the things that we need to partner with,” De Luca said.

While HDS is strategically playing to its strengths in the private cloud market, the vendor hasn’t completely neglected the public cloud space either. While De Luca acknowledged the company is going up against some of the biggest players including Amazon and Google that have “certainly validated a new business model”, HDS is prepared to be part of it.

In June, the company announced a number of mobility products so it could integrate public cloud offerings and extend its technology portfolio.

“What we talked about is how we can take, for example, our archive platform and actually connect a public cloud behind it. Our file serving can also leverage public cloud. This is all a big maturity change or step change of HDS in Australia. We’ve not only recognised cloud, but we’re also becoming successful in it,” said De Luca.

The plan of attack for HDS will be to target the smaller end of town, the SME market, an area that the company hasn’t traditionally been involved in before, but according to De Luca is responding better to moving to the cloud.

“I think what is happening here is that we have a clever SME community who are saying that they’re not going to bother hosting their own cloud, or buy their own components, but are going straight to a cloud service provider for all of that,” he said.

“But what they’re saying is they want to go to a local cloud service provider because they want that customer service onshore. So we’ve created a cloud service provider unit that is focused on our multinational service providers.”

The only challenge now for the company is to convince the rest of the market that HDS is serious about being a key cloud vendor.

“Quite frankly our challenge is being recognised in the market for providing these services,” De Luca said.

“We’re not a strong marketing company but we power a lot of the technology behind these local providers, so we’re happy to be the silent partner in this.”